Cash Flow Statement

The Cash Flow Statement is the third of LedgerBuk’s three financial pillars. It shows where your cash actually went during a period — because profit on paper doesn’t always mean cash in your account.

Purpose

This report answers: “Where did the cash go?”

A business can be profitable but still run short on cash. For example, if you sold KES 500,000 worth of services but customers haven’t paid yet, that money is stuck in receivables — not in your bank account. The Cash Flow Statement shows you the real picture.

Tip

LedgerBuk uses the Indirect Method, which is the most common approach worldwide. It starts with your profit and adjusts for items that didn’t involve actual cash.

Accessing the Cash Flow Statement

1. Navigate to Reports → Cash Flow in the sidebar
2. Select the period (annual, quarterly, monthly, or custom date range)
3. The report generates automatically

Note

The Cash Flow Statement is available on Pro and Enterprise plans. Starter plan users will see an upgrade prompt.

How It Works

The report takes your profit from the Profit & Loss report and works backward to figure out what actually happened with cash:

1. Start with Profit for the Period

   This is the same profit number from your Profit & Loss report.

2. Add back non-cash items

   Some expenses (like depreciation) reduce your profit on paper but don’t actually take cash out of your account. These get added back.

3. Adjust for changes in what’s owed

   If customers owe you more than last month (receivables went up), that means cash hasn’t arrived yet — so it’s subtracted. If you owe suppliers more (payables went up), you’re holding onto cash longer — so it’s added.

4. Show equipment purchases and loans separately

   Buying a vehicle or receiving a bank loan are big cash events that aren’t part of daily operations. They’re shown in their own sections.

5. Check: Beginning Cash + Net Change = Ending Cash

   The final reconciliation — your ending cash should match what’s on the Balance Sheet.

Reading the Report

Operating Activities

Cash from day-to-day business — the core of your operations.

Line	Example	What It Means
Profit for the period	KES 150,000	Starting point — from Profit & Loss
Depreciation	KES 20,000	Didn’t use cash, so we add it back
Increase in Receivables	(KES 30,000)	Customers owe you more — cash not yet received
Increase in Payables	KES 15,000	You owe suppliers more — holding onto cash longer
Net Cash from Operations	KES 155,000	Actual cash generated from running the business

Investing Activities

Cash spent on or received from long-term assets — equipment, vehicles, property.

Line	Example	What It Means
Purchase of Equipment	(KES 200,000)	Cash paid for new equipment
Net Cash from Investing	(KES 200,000)	Total cash spent on investments

Financing Activities

Cash from or to owners and lenders — loans, owner investment, dividends.

Line	Example	What It Means
Loan Proceeds	KES 100,000	Cash received from a bank loan
Owner Capital	KES 50,000	Owner invested more money
Net Cash from Financing	KES 150,000	Total cash from financing

Summary

Net Cash from Operations:         KES 155,000
Net Cash from Investing:         (KES 200,000)
Net Cash from Financing:          KES 150,000
                                 ───────────
Net Change in Cash:               KES 105,000
Beginning Cash:                   KES 200,000
Ending Cash:                      KES 305,000  ✓ Reconciled

Cash Account Breakdown

At the bottom of the report, you’ll see a breakdown of each cash account — showing how each one changed during the period:

Account	Beginning	Ending
Cash on Hand	KES 50,000	KES 55,000
KCB Bank Account	KES 100,000	KES 200,000
M-Pesa Float	KES 50,000	KES 50,000
Total	KES 200,000	KES 305,000

This total should match the cash balance on your Balance Sheet.

Account Setup for Accurate Reports

For the Cash Flow Statement to classify your accounts correctly, certain account flags need to be set. See Account Flags for the complete guide.

Flag	Set On	Why
Payment Account	Cash, Bank, M-Pesa accounts	So the report knows which accounts hold cash
Cash Equivalent	Money market funds, T-bills (≤3 months)	Treated as cash, not as a change in what’s owed
Non-Cash Expense	Depreciation, amortization	So the report knows to add these back

Template accounts have these flags set automatically. For custom accounts, toggle them when adding or editing the account.

Caution

If no accounts are flagged as Payment Account, the Cash Flow Statement will show zero beginning and ending cash. Make sure your cash and bank accounts have this flag enabled.

Printing

Click the Print button for a clean, print-ready version that includes:

• Your organization name and logo
• Period dates
• All three activity sections
• Cash reconciliation summary

How It Connects to Other Reports

Report	Connection
Profit & Loss	The profit shown there is the starting point of this report
Balance Sheet	Your ending cash here should match the cash balance on the Balance Sheet
Trial Balance	Run this first to confirm your books are balanced

Next Steps

• Learn about the Balance Sheet to see your financial position
• Learn about the Profit & Loss to understand profitability
• Return to the Reports Overview for the full picture